The Balance of Owner's Capital at the Beginning of the Year

question 85

Multiple Choice

The balance of owner's capital at the beginning of the year and the end of the year was $50,000 and $67,000, respectively. No additional capital was introduced during the year. Withdrawals were $23,000. What was the net income or loss for the year?

• A)Net income of $90,000
• B)Net loss of $90,000
• C)Net loss of $40,000
• D)Net income of $40,000

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Definitions:

Cash Collections

The total amount of money received by a company from its various sources, including sales, during a specific period.

Selling Price

The amount for which something is sold, establishing the revenue a company receives from the sale of a product or service.

Direct Materials Budget

A financial plan that estimates the raw materials required for production and the associated costs based on forecasted sales.

Raw Materials

The basic, unprocessed elements or ingredients used in the manufacturing process to create finished goods.